Shortly after Nevada's recreational marijuana program launched in July, a state of emergency was reported when dispensaries did not have enough product to support demand.

The cause of this issue was due to a shortage of businesses able to deliver product to dispensaries and this the issue is now causing a problem.

Shortage Causes Significant Drop in Revenue

Last week, Nevada’s Department of Taxation reported that sales have dropped 20% to 30% since the July.

The products are flying of the shelves and dispensaries have said they need more and faster deliveries. While the dispensaries say they need at least 9 to 11 weekly deliveries on minimal notice, they are currently waiting closer to a week to two weeks.

According to the report, this shortage is leaving dispensaries with a product selection that's been reduced by more than half.

Deonne Contine, director of the Nevada Department of Taxation, said, “These (retail marijuana) businesses are struggling without a robust distribution system. Cultivators and producers have product sitting for days waiting to be delivered to stores while the quality of the product degrades. Retailers do not have the products their customers desire, products that are legal and should be available to them.”

Is Change Coming?

The mandate requiring Nevada to rely solely on alcohol distributors to deliver recreational marijuana to dispensaries could be revoked today in a Carson City District Court hearing.

Part of the legislation passed in November provided alcohol distributors with exclusive rights to recreational marijuana, but the state determined that there are currently not enough qualified alcohol distributors for the job.

Friday Night Continues to Execute on the Nevada Market

Friday Night (TGIF.CN) (VPGDF) is based in Canada but focused on the burgeoning legal recreational marijuana market in Nevada. The company recently reported very strong numbers from its Nevada-based operations and we are excited by the opportunity offered through Friday Night.

The company does not suffer from the distribution issues plaguing the industry. Last month, Friday Night entered a contract with Blackbird for distribution and delivery. Blackbird was the first marijuana company to receive a license for distributing medical and recreational marijuana. 

The company is led by an experienced management team that previously worked with several large scale marijuana producers and is focused on a market that is seeing incredible growth. We are favorable on the growth prospects and believe that Friday Night is a stock to watch.